Mortgage originations surged in the second quarter of 2017 despite a decline in refinancing. Black Knight Financial Services reports that first lien mortgages rose 20% from the first quarter and are up 16% from a year ago, totaling $467 billion in the second quarter. During the second quarter, refis declined 20%, or $37 billion, from the first quarter to 31% of the market share of originations, the lowest level in 16 years. The average purchase loan origination amount rose to an all-time high of $286,000 in the second quarter of 2017.
U.S. Stocks are in rally mode to begin the week as North Korea and Hurricane Irma fears ease. Over the weekend, North Korea was supposed to test a new missile, but instead threw a party marking its government's 69th anniversary. Hurricane Irma made landfall over the weekend in Florida, but the storm was not as catastrophic as first thought to be. Stocks had been under pressure for the past several weeks, but that cloud has now been lifted. The Dow Jones Industrial Average, the S&P 500 and NASDAQ are near all-time highs.
Last week, Fed Governor Lael Brainard said that the central bank should be cautious on raising interest rates as inflation is “well short” of the Fed’s target range of 2%. Inflation data has been running low for some time as the Fed’s favorite inflation gauge, the Core PCE, is at 1.4% year over year and has been edging lower for the past five months. If inflation continues to run low, home loan rates will remain low. This week inflation numbers will be seen from the wholesale level, the Producer Price Index, and the Consumer Price Index.
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